Heart Valve Maker Offers to Settle Lawsuits

Pharmaceutical giant Pfizer Inc. on Friday announced a proposal to spend up to $205 million to settle hundreds of lawsuits arising from a potentially faulty heart valve that has been blamed for about 265 deaths.

But attorneys for some of the 55,000 people who have received implants of the artificial valves, manufactured by Pfizer’s Irvine-based Shiley Inc. subsidiary, were chilly to the proposal. The $2,000 to $4,000 that Pfizer will offer patients whose valves have not failed is grossly inadequate, they said.

“This matter does nothing to compensate for their primary element of damage, which is their stark terror that their valve may malfunction at any moment and kill them,” said Vance C. Simonds Jr., who represents 89 patients whose valves have not broken but who are suing Pfizer and Shiley for emotional distress and fraud.

For years, Pfizer has paid undisclosed settlements to families of patients who died when their valves fractured. But, with just one exception, it has refused to pay claims by those whose valves are working.

Friday’s proposal reversed that policy.

The first group of more than 400 such “fear of fracture” suits are expected to come to trial in Orange County Superior Court this year. The cases pose a novel legal question: Should a patient implanted with a lifesaving heart valve that has a tiny risk of failure be compensated for their anxiety?

The manufacturer says no. “We do not believe that there is any basis for a claim when people have a valve that is functioning,” said Shiley spokesman Robert Fauteux.

Some states do not permit claims for emotional injury unless the litigant has suffered physical harm or been sold a product that failed. So patients from across the country have flocked to file suit in California, where an appeals court has ruled that patients can collect damages if they can prove fraud.

Pfizer has offered a settlement to fewer than a dozen patients that must be approved by a court in Cleveland. But the same offer is open to all Shiley valve recipients. If they accept, the proposed total $205-million settlement would limit Pfizer’s liability if it were to lose the California cases.

The settlement offer marks Pfizer’s latest attempt to rid itself of a corporate albatross. Pfizer bought Shiley in 1979, just one month before the Bjork-Shiley 60-degree Convexo-Concave heart valve went on the market.

Some valves had fractured before reaching the market, but the federal Food and Drug Administration approved the device based on data submitted by Shiley. That data, which the FDA now calls “misleading,” purported to show that the Shiley valve was far superior to other heart valves then on the market and that its benefits outweighed the risks.

Fewer than 1% of the valves have fractured, according to the company. Plaintiffs’ attorneys put the failure rate as high as 4%. What is not in dispute is that about two-thirds of the 461 patients whose valves had malfunctioned as of November have died within hours.

Shiley pulled the valve off the market in 1986. It has since been scolded by the FDA and a congressional committee, and accused in several hundred lawsuits of fraudulently overstating the benefits of its valves and ignoring or covering up production defects. The company insists it did nothing wrong.

In December, Pfizer sold most of Shiley’s assets to SNIA BPF S.p.A., a subsidiary of the Fiat group in Milan, Italy. Shiley was left as a shell to deal with the litigation and conduct research aimed at helping heart valve patients. Pfizer announced it would set aside $300 million as a reserve to compensate future valve-fracture victims. The onetime charge wiped out the company’s earnings for the fourth quarter of 1991.

Second, Pfizer said it has agreed to establish a fund of $80 million to $130 million for Shiley heart valve recipients worldwide.

Each patient will receive a lump-sum payment of between $2,000 and $4,000, depending on how many of the 55,000 eligible patients accept the settlement, Fauteux said. The money is intended to pay for consultations with cardiologists, but no conditions are attached to its use, he said.

Pfizer also said that it is earmarking $75 million for the Heart Valve Research Center in Irvine, which is working on ways to identify those patients whose valves are at highest risk of fracture. Finally, the company said it will guarantee compensation to patients “in the unlikely event of valve fracture.”

However, attorney Bruce Finzen, who represents about 370 patients whose valves are working and the families of 12 whose valves failed, said he would be “astounded” if any of his California clients took the offer.

Even if patients use the settlement to consult a cardiologist, “there isn’t any non-invasive method (short of open-heart surgery) right now known to detect an incipient fracture,” Finzen said.

Pfizer general counsel Paul Miller called the offer “a prudent way to resolve complex, time-consuming litigation.”

“Overall, we think the agreement we announced today represents a fair, equitable, balanced settlement,” Miller said.

Pfizer stock, which has more than doubled since last year on the strength of several new drugs, gained 87.5 cents Friday to close at $76.125 per share.

“They would like to get this whole thing behind them,” said Marc O. Mayer, an analyst at the New York investment firm Sanford C. Bernstein. “It’s an unpleasant issue, an ugly memory that has very little to do with what this company is doing today.

“Pfizer is becoming one of the most important and innovative pharmaceutical companies in the world today, and they’ve been dragged down by Shiley.”

Shiley’s Troubled History 1966: Shiley incorporates as a heart valve manufacturer. 1969: Dr. Viking O. Bjork, a Swedish surgeon, implants the first Bjork-Shiley heart valve at Karolinska Hospital in Stockholm. 1979: Pfizer Inc. acquires Shiley along with the new Bjork-Shiley 60-degree Convexo-Concave heart valve, which has just received federal government approval for U.S. marketing. 1980: February--First voluntary recall follows reports of strut fractures on several valves; subsequent such recalls come in 1982, 1983 and 1985. September--Distribution of the Bjork-Shiley 70-degree Convexo-Concave valve begins outside United States. 1982: Responding to federal government requests to stop distribution until the defective valve problem is solved, Shiley assures the government and doctors that its valves are now reliable. 1983: January--Federal government rules that Shiley may continue to distribute its heart valves, saying the benefits outweigh the risks. May--Shiley begins recall of 70-degree valves less than one week before government formally revokes its export permit. 1984: April--Shiley implements new inspection procedures. Since then, none of the approximately 8,100 60-degree heart valves manufactured have reported strut fractures. August--A former Shiley engineer and member of the Ralph Nader group, Public Citizen, submits documents relating to manufacturing deficiencies in a complaint to the federal government. September--Despite assertions by Public Citizen and even Shiley’s own admission that the 60-degree valve may be failing, the federal government maintains its benefits/risks stance. 1985: October--Shiley voluntarily recalls the 60-degree valves manufactured after February, 1982, that had not been implanted. November--$32-million lawsuit filed against Shiley after a Canadian nearly dies when a valve breaks inside of him; out-of-court settlement is reached May, 1987. 1986: Shiley voluntarily withdraws all 60-degree valves from distribution. 1988: May--Shiley, facing about 200 lawsuits, seeks state legislation limiting the ability of foreign patients to sue; lawmakers kill the bill. August--Shiley is hit with 79 more lawsuits. The company receives a favorable ruling from U.S. Court of Appeals limiting lawsuits by foreigners. 1990: January--Latest figures indicate that of the 86,000 valves implanted worldwide, 391 have reported strut fractures. A California appellate court rules that patients whose valves have not fractured can sue for emotional distress if they can show that Shiley fraudulently withheld information about problems with the valves. March--Public Citizen files a consumer-protection lawsuit in Los Angeles against Shiley on behalf of 80,000 heart valve recipients. The suit demands that the company provide valve users with medical consulting and a warning about the device’s dangers. April--A Canadian woman files suit in Los Angeles alleging that the Shiley valve malfunctioned after it was implanted in her chest, forcing her to undergo emergency bypass surgery. May--The California Supreme Court lets stand a lower-court ruling giving valve recipients permission to seek damages for emotional distress; of the other 19 jurisdictions that considered the legal merits of the emotional distress suits, California is the only one not to rule in Shiley’s favor. June--A Los Angeles Superior Court judge dismisses Public Citizen’s consumer-protection suit. August--Pfizer announces its intention to start an “innovative, far-reaching program” to establish a registry of all living patients implanted with its valve “to facilitate the flow of medical information to these patients.” September--Appeals court rules that foreigners whose valves malfunctioned cannot pursue claims in U.S. courts; three months later, the California Supreme Court agrees to review the case. December--Federal government announces formal approval of Pfizer’s national program to alert 19,000 doctors about potentially flawed heart valves. 1991: January--A Miami law firm files a class-action suit in federal court in Los Angeles on behalf of about 55,000 patients. The law firm estimates damages of $75,000 to $100,000 per plaintiff. June--A federal judge in Los Angeles denies class-action status, saying the degree of emotional distress suffered by each patient varies too much to qualify as a class. In a separate ruling also favorable to Shiley, a state appellate court in Santa Ana orders a lower court to reconsider its decision allowing a Canadian recipient to sue the company in California. July--A class-action suit on behalf of 1,000 Florida residents is filed in federal court in Miami. September--A Florida law firm files suit in Santa Ana on behalf of 61 valve recipients who claim emotional distress; their claim is expected to be merged with a suit by about 430 other patients. November--The state Supreme Court rules that Shiley cannot be sued in California by foreigners. December--Pfizer announces its intention to sell most of the product lines of Shiley; the company will retain the Shiley Heart Valve Research Center, as well as legal responsibilities for defective heart valves. 1992: January--Pfizer announces a proposal to spend up to $205 million to settle hundreds of lawsuits arising from the Shiley valves.

Researched by DALLAS M. JACKSON / Los Angeles Times

Defective Heart Valve

About 55,000 patients worldwide are wearing an artificial heart valve blamed for about 300 deaths. How some of the valves have fractured: Bjork-Shiley Convexo-Concave valve Fracture: When strut breaks, tilting disk cannot open and close properly to control blood flow Where It’s Placed in the Heart: Artificial valve replaces diseased natural valve. Source: Shiley Inc.